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There is no clear definition of a premium directory. In other words this term is as much the directory owner’s opinion as anything. However, the term is somewhat common and there are some common variables to look for before classifying a premium directory:

1. Name recognition
2. Traffic volume
3. Age of the directory
4. SERP positioning for key terms
5. PageRank, Alexa, etc.

1. Relevancy
2. Quality
3. Traffic
4. Cost

Your specific needs will determine which of these is most important to you. For SEO/SEM the relevancy and quality may be more important than traffic, but traffic might be important if you need to drive immediate visitors to your site. Only the most popular directories drive a significant amount of traffic, and these can be fairly expensive. The cumulative effect of being listed in many medium-sized directories can also result in good traffic though, and can often be much more affordable.

Some Webmasters will list in thousands of directories using bulk submission, but I rarely take this approach. Usually you end up getting the exact same listing on hundreds of low quality sites. I tend to prefer a more diverse and rich set of listings on a smaller number of higher quality sites.

Some Webmasters also frown upon new directories since they have no established “authority” in search engines. I like new directories because they are often being actively promoted, whereas many older directories are simply lying dormant. It has also been my experience that search engines (Google in particular) frown on new content in some respects, but also love delivering fresh results.

Niche directories can help new directory owners succeed with less competition than big general directories. Niche directories also provide more relevant and useful backlinks for search engine optimization purposes. One challenge for owners of niche directories is finding enough relevant listings - in other words, actually having a substantial enough user base. A niche directory like “sock repair” may not attract enough people to warrant an entire directory, but “socks” might.

The directory script that the directory owner uses is an important decision since it will directly affect the quality, ease of use and long-term success of the directory. A link bid script and directory software supporting the bid model is an investment. The quality of your Web site is telling your potential members how hard you are working to promote your directory.

When you’re looking for free directories to add your link to, observe the number of links they already have and the quality of their listings. If the directory is unmanaged, unpromoted, and full of SPAM, it’s best to steer clear.